The proposed budget means the AFC will once again be compelled to find new savings in its operating costs, as the cut in the equipment acquisition allocation reduces the procurement budget in 2014 to $628 million. The new savings will take place alongside the AFC’s push to complete the core parts of its Defense Reorganization Program in 2015-2016.

In real spending terms, the defense budget for 2014 is $167 million lower compared with the 2013 allocation. Finland’s defense spending, as a proportion of its gross domestic product (GDP), has been falling steadily since 2008. It currently stands at 1.47 percent, but will fall to 1.36 percent of GDP in 2014.

The government-ordered renewed savings drive will also affect training, with the AFC hoping to reduce its funding outlay by taking part in more joint cross-border Nordic land, naval and air exercises where capabilities can be sharpened and costs shared among partner nations.

Overall, the budget allocated to defense will amount to $3.67 billion in 2014. This includes supplementary spending of $451 million. By contrast, the defense budget for 2013, including supplementary spending, is set at $3.84 billion.

The financial belt-tightening being felt by the Finnish military is unlikely to improve over the short term given that the government’s expenditure provisions for 2015-2017 envisages budget spending averaging at $3.43 billion, including supplementary funds.

Recent changes in the Finnish defense budget have produced a cut in force levels, a plan to close six garrisons, and a reduction in the number of mobilized troops from 350,000 to 230,000 by 2015.

The AFC hopes to find new savings that will not negatively affect force capability or quality. However, this may prove difficult in an environment of reduced funding resources.

Despite the need for more savings and funding cutbacks, the AFC’s training budget remains sufficient to cover significant trans-national maneuvers, such as the cost-sharing and capability-sharpening Arctic Challenge Exercises, which runs from Sept. 16 to 27.

Comprising some 80 Finnish F-18 Hornet, Swedish Gripen and Norwegian F-16 fighter jets, the exercises are taking place across Finnish, Swedish and Norwegian airspace in the High North close to the Barents region.

Beside the Nordic air forces, the Arctic Challenge Exercises will include aircraft from Britain and the United States, in addition to NATO Airborne Warning and Control System aircraft. Around 30 US Air Force F-15s, supported by up to two air-refueling tankers, will participate, along with about six Royal Air Force Eurofighter Typhoons.